NACL: Agriculture facing cuts no matter what

Presently, there is not a farm bill in effect. The 2008 Farm Bill expired Sept. 30 with Senate and House bills still on the table.

Sarah Morris, reporter3@stuttgartdailyleader.com

It's a tough budget environment. National Agricultural Law Center director Harrison Pittman said agriculture is going to take cuts no matter what.

It was a key point that Pittman said he wanted to make sure got across to the more than 60 producers attending last week's Farm Bill workshop at the Grand Prairie Center.

Presently, there is not a farm bill in effect. The 2008 Farm Bill expired Sept. 30 with Senate and House bills still on the table.

It wasn't exactly what Pittman had in mind when he originally scheduled the workshop. He said he had hoped the 2012 Farm Bill would have been approved with discussion centering on what it meant.

Instead, Pittman discussed the differences between two possible Farm Bills, one passed by the Senate on June 21 and the other passed House Ag committee passed on July 11. No matter what he said it would look different than what they are used to.

The "lame duck" Congress has several options once it reconvenes. It could return and enact a multi-year, comprehensive Farm Bill before the 112th Congress ends; pass a temporary extension and take new discussion in the Congress; allow the Farm Bill to revert to "permanent law," meaning it would go back to the 1938 or 1949 Farm Bill; or none of the above with Congress passing a law to suspend or repeal both the 1938 and 1949 Farm Bills.

Pittman said he thinks it is most likely a new Farm Bill would be passed by Dec. 31 that is similar to the 2008 bill. Presently both the Senate and House bills have 80 percent falling under nutrition. The 2008 Farm Bill's budget baseline is $1 trillion over the next 10 years. The Senate bill reduces this spending $23.1 billion while the House bill cuts $35.1 billion.

Both bills also eliminate direct payments although there are differences between the two.

The Senate bill includes the Ag Risk Coverage (ARC) program, designed to compliment crop insurance with coverage on the individual or county level. It would cover "shallow loss" in the 79-89 percent range. In the House bill, producers would choose between a Revenue Loss Coverage (RLC) that includes minimum crop prices and an 85 percent revenue loss trigger or the Price Loss Coverage (PLC) program, similar to the old counter-cyclical program. Payments are made when the marketing year average price producers receive for a covered commodity is less than the target price.

The Senate bill also reduces the authority of the National Appeals Division (NAD) director to make decisions about the equitable relief for a producer. Pittman said it was originally created to give producers more individual reviews and, right now, the director has sole authority. The bill would modify the present relationship between the NAD director and the USDA secretary.

Pittman said its news worth paying attention too. He also recommended producers use insurance as a tool and become educated on crop insurance.

The federal crop insurance program is not affected by the Farm Bill's expiration and can only be amended by the new bill.

Grant Ballard of Banks Law Firm said it's not a typical two-party agreement — the farmer contracts with a private insurance company who is reinsured by USDA, meaning farmers need to be proactive and know the law thoroughly when they deal with crop insurance.

Producers need to provide notice of problems in a timely manner. It's important to document and gather data from reliable sources.

Ballard said the burden of proof in a claim is on the farmer as well as making sure they follow every step of the process properly.

Another issue he recommends producers looking at is their farm lease if applicable. He said farm leases should be written agreements, include a termination cause, state the responsibilities of both the landlord and the tenant as well as address the federal farm programs and who applies.

Each lease should also state the controlling law is where the land is. Ballard said arbitration, the submission of a dispute to an unbiased third party, is sometimes considered the cheapest and easiest solution.

However, Ballard disagreed and asked producers to study their options carefully.